c505218304b50c59c3659f6dda43bae7-links-0–>It’s Monday and our Trade of the week (two trades) – is up more than $1.5k combined.
We had one futures trade and one options trade.
In the weekend post: Weekend, 05/14/17 – Bears Retesting 2030-2040, Will They Drop The Ball in a B-wave Fakeout? – we predicted that the Bears would drop the ball and that is indeed what happened. For members, we made a detailed video and walked through the history of the S&P and found similar patterns that would help guide is in our decision-making process and give us the confidence to stick with our trade plan. That conviction makes all the difference.
As the quote on the right says, I think it is important to take time to understand the past so you can better surf the future. Absolutely.
This is an exercise I do on a continual basis and I shared part of this thinking this past weekend. I’m not always right in my analysis – but in this case, that analysis helped generate thousands for subscribers.
Look carefully at the pink line.
My prediction was that we would:
Of those, the first 4 waves were pretty spot on within 1-2 points of error! Amazing! And yes, I did personally scalp (or carve) each wave according to the chart.
Now, I know as a trader, I need to keep my ego in check because the markets have a way of humbling everyone — but that was damn good!
Of the major indices, the Nasdaq rose the most. And guess which index we alerted subscribers to buy?
That’s right, the Nasdaq (NQ) — or equivalently the QQQ / TQQQ ETFs.
I bought at 4320 — but anything in that 4320-4335 region was an excellent buy.
The Nasdaq rose much faster than I had expected — and while I see more room on the upside, I decided to cash out the 50 points (so I have something to blog about). Since each Nasdaq point is $20 — that’s 50 * $20 = >$1,000 in profits.
The pink circles correspond with our prediction in the chart we posted over the weekend.
So this rally went well above what I expected for the top of wave 1. I was expecting 2061 — but we got an extension to 2068. I wonder whether this is wave 1 or wave 3. Given the height of the rise, I would have to adjust my expectations for the wave 2 retrace if there is one. Initially, I was expecting 2051/2052 — but it seems we might not get there. Something closer to 2056/2059 might be all we get — and it’ll probably happen in an A-B-C pattern.
But given this rise, I think the numbers I mentioned in the video — 2089/2090 — may realistically be achieved if we get a 3rd wave higher. When I made the above prediction over the weekend, we are at 2040 – and it did not seem possible to many people. But here we are approaching 2070 — so those higher levels are potentially within reach.